PVM Midday Report 13 June 2016
Headlines
OPEC hints at tighter oil balance in 2H 2016; output down 100,000 bpd in May
Chinese implied oil demand falls by 380,000 bpd in May y/y to 10.24 mbpd
Iran’s biggest oil…
Introduction. Last night’s closes were respectable, except for the fact that RBOB, although having held its 13 day MA on the dip, was still below the 5 and 8 day MAs. It is easy with the benefit of hindsight to say that this lack of enthusiasm by RBOB should have made one wary of the closes on the rest last night and that this morning’s headline driven dump was a “given”. This is nonsense, but RBOB’s lack of enthusiasm – it alone closed below the 5 and 8s last night – may well have made many cautious. We’re back to where we were yesterday morning with a vulnerable, volatile and dangerous market. The contracts have overnight moved below the 5 and 8 day MAs but are still holding over – just in RBOB’s case – the 13 day MA. The key today lies with the action around the 5 and 8s on a rally and at the 13s on the dump. If RBOB moves and closes (m/c) below its 13 day MA around 145.42 then both it and the rest are in trouble and serious tests of support should follow.
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